Risk And Compliance Leaders Charged With Raising The Bar On Non-Financial Risk
Kaizen recently hosted a roundtable to discuss the implications of ASIC’s Corporate Governance Task Force Report, spearheaded by ASIC Chair, James Shipton. The task force was established following revelations of significant corporate governance failure during the recent banking royal commission.
The roundtable was chaired by Alex Lord, Financial Services Director at Deloitte and attended by risk and compliance leaders across superannuation, funds management and banking.
According to Shipton’s report, company board members demonstrate a tendency to overlook non-financial risk including operational, compliance and conduct risk. Boards must recognise that they are accountable for mitigating all risks – financial and non-financial. Risk and compliance professionals are charged with making this happen.
Top three takeaways from the roundtable event:
- Organisations need to undertake a non-financial risk management ‘health check’.
- Sharing of actions and flow of information must improve horizontally between boards, committees and sub-committees.
- Board members must ‘raise the bar’ by seeking advice and education opportunities regarding non-financial risk management so they can make better decisions.
Further insights shared…
Board packs must be easier to consume
Non-financial risk materials must be presented to the board concisely and not buried in dense board packs of up to 700 pages. Providing ‘headline items’ followed by detail simplifies documentation presented to the boards. Risk and compliance executives may also benefit from routine meetings with the chairperson to ensure important risks are high on the agenda.
New risks emerge on a daily basis
Attendees reported that risks accepted at previous board meetings, were already changing in nature at the following board meeting because the nature of risks are rapidly evolving. It is no longer a case of complying with the law, but now also very much about meeting the expectations of the community.
Promote a healthy risk culture
There is a significant change management aspect to raising non-financial risk awareness. Educating employees and providing positive reinforcement is critical. This may include establishing rewards mechanisms that encourage good conduct and promote employees to proactively report potential risks.
On behalf of Kaizen Recruitment, I would like to thank Alex Lord for his preparatory efforts and excellent chairing of the roundtable session. Thank you very much to our guests for their participation and generous exchange of ideas and opinions. We look forward to seeing you at our next event.
Regards
Matt McGilton – Director
Kaizen Recruitment specialises financial services recruitment across funds management, wealth management, superannuation, investment consulting and insurance. We are based in Melbourne and Sydney. For assistance or further information please telephone our office at +61 3 9095 7157 or submit an online form.
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